Asia's road to recovery is in inventory

Non-Japan Asia is leading the global economic recovery, but the growth trend is flattening out as the stimulus effect begins to taper, according to Credit Suisse's vice-chariman of fixed income.

At the same time, recovery in the G8 countries has been slow due to grave corporate debt problems, Bunt Ghosh said as he shared his firm's outlook for the region at the Credit Suisse Asian Investment Conference in Hong Kong yesterday.

The real story behind the growth slowdown, he argued, is that the corporate sector has been cutting back on inventory. In terms of industrial production, the corporate sector has not expanded inventory, said Ghosh. Until the corporate sector starts rebuilding inventory,...